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CCA depreciation Year Bn-1 CCA Dep. Bn 1 $250,000 $37,500 $212,500 2 $212,500 $63,750 $148,750 3 $148,750 $44,625 $104,125 4 $104,125 $31,238 $72,888 5 $72,888
| CCA depreciation | ||||||
| Year | Bn-1 | CCA Dep. | Bn | |||
| 1 | $250,000 | $37,500 | $212,500 | |||
| 2 | $212,500 | $63,750 | $148,750 | |||
| 3 | $148,750 | $44,625 | $104,125 | |||
| 4 | $104,125 | $31,238 | $72,888 | |||
| 5 | $72,888 | $21,866 | $51,021 | |||
| Calculation of net Salvage | UCC at year 5= | $51,021.25 | ||||
| Proceed S= | $100,000.00 | |||||
| Gain on disp.= | $48,978.75 | |||||
| Tax effect G= | $17,142.56 | |||||
| Net S= | $82,857.44 | |||||
| Year | 0 | 1 | 2 | 3 | 4 | 5 |
| OR | $45,000 | $45,000 | $45,000 | $45,000 | $45,000 | |
| Dep | $37,500 | $63,750 | $44,625 | $31,238 | $21,866 | |
| BTCF | $7500 | -$18,750 | $375 | $13,763 | $23,134 | |
| Taxes | $2625 | -$6563 | $131 | $4817 | $8097 | |
| Net Profit | $4875 | -$12,188 | $244 | $8946 | $15,037 | |
| Dep | $37,500 | $63,750 | $44,625 | $31,238 | $21,866 | |
| Investment | -$250,000 | |||||
| Salvage | $82,857 | |||||
| Net ATCF | -$250,000 | $42,375 | $51,563 | $44,869 | $40,183 | $119,761 |
Based on the above after tax cash flows, what is the NPW of this project if the interest rate is 12%?
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Financial Accounting
Authors: Carl Warren
13th Edition
1133607616, 978-1133607618
